Honda pulls back on EV strategy for now and will push hybrid sales
[May 20, 2025] By
YURI KAGEYAMA
TOKYO (AP) — Honda said Tuesday electric vehicle sales were slowing in
the U.S., prompting the Japanese automaker to scrap its previous goal
for EVs to be 30% of its global vehicle sales by 2030.
Instead of the initial plan to invest 10 trillion yen ($69 billion) in
an electrification strategy through the fiscal year ending in 2031,
Honda is reducing that investment by 3 trillion yen ($21 billion) to 7
trillion yen ($48 billion).
Honda Motor Co. Chief Executive Toshihiro Mibe called the decisions “a
switch in the planned course,” while stressing the long-term shift
toward electrification remained unchanged, just pushed back in time.
Mibe didn't mention U.S. President Donald Trump. But Trump’s policies on
tariffs, as well as his lack of enthusiasm for electric vehicles, have
Japanese automakers scrambling to adapt.
“The environment surrounding the automobile industry is changing day by
day. Uncertainty in the business environment is increasing, due
particularly to the slowdown in the expansion of the EV market due to
several factors, including changes in environmental regulations,” Honda
said in a statement.
Mibe did not give a specific timeline for a new course for
electrification. But Honda, which makes the Civic and Accord car models,
will be more aggressive in producing hybrids instead, he said.
Honda’s auto plant in Marysville, Ohio, for instance, will be adapted to
produce both EVs and hybrids under the new plan.
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Honda Chief Executive Toshihiro Mibe speaks during a news conference
in Tokyo, Japan, Tuesday, May. 20, 2025. (Kyodo News via AP)
 Mibe pointed to Honda’s motorcycle
business as its core strength, as sales continue to grow in India,
and Honda’s global market share was steadily rising.
Mibe also said the Tokyo-based automaker was working on the use of
various digital technology to strengthen safety, including assisted
driving that will bring deaths from traffic accidents down to zero,
a longtime Honda goal.
Talks that began late last year to bring together the operations of
Honda and Japanese rival Nissan Motor Corp., as well as smaller
automaker Mitsubishi Motors Corp., in a merger, collapsed earlier
this year. Mibe told reporters talks were still ongoing to have the
three automakers work together on developing technology. He remained
vague and did not say when a deal might be reached.
Nissan is sinking into losses, reducing its work force and
shuttering plants. Its new chief executive, Ivan Espinosa, is
promising a turnaround by speeding up decision-making.
Honda’s profit for the fiscal year through March slipped 24.5% from
the previous year. But much of the negative impact is from external
factors like tariffs and sliding sales in China.
“Honda’s profitability outlook remains robust, supported by
cost-cutting initiatives,” said Aaron Ho, equity analyst at CFRA
Research.
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